Probabilistic flows of inhabitants in urban areas and self-organization in housing markets

TL;DR

This paper introduces a probabilistic model to explain the spatial rent distribution in Sapporo, highlighting self-organization phenomena where low-paying agents form distinct communities away from attractive areas.

Contribution

It extends a previous mathematical model by incorporating competition between proximity to the city center and the office, and compares simulation results with real-world data.

Findings

Low-paying agents cluster in less attractive regions.

Self-organized communities emerge in low-price areas.

Model successfully replicates empirical rent distribution patterns.

Abstract

We propose a simple probabilistic model to explain the spatial structure of the rent distribution of housing market in city of Sapporo. Here we modify the mathematical model proposed by Gauvin et. al. Especially, we consider the competition between two distances, namely, the distance between house and center, and the distance between house and office. Computer simulations are carried out to reveal the self-organized spatial structure appearing in the rent distribution. We also compare the resulting distribution with empirical rent distribution in Sapporo as an example of cities designated by ordinance. We find that the lowest ranking agents (from the viewpoint of the lowest `willing to pay') are swept away from relatively attractive regions and make several their own `communities' at low offering price locations in the city.